Nintendo Plans to Invest Up to $881 Million to Expand Game Development - News
by William D'Angelo , posted on 05 November 2021 / 4,975 Views
The president of Nintendo Shuntaro Furukawa in the policy briefing for the earnings report revealed Nintendo plans to invest up to 100 billion yen ($881.8 million USD) to "expand its game software development frameworks inside the Nintendo group."
Nintendo also plants to invest up to 50 billion yen ($440.9 million USD) in non-game entertainment and up to 300 billion yen ($2.65 billion USD) in a foundation for maintaining and expanding relationships with consumers.
"As a company that brings smiles through entertainment, Nintendo’s goal has always been to create original entertainment," said Furukawa. "In a business with extreme fluctuations like the entertainment business, the basic policy of our financial activities has been to secure cash and other liquid assets so we can continually offer products and services that constantly deliver new surprises.
"While this basic policy will not change, the Nintendo Switch business has exceeded our expectations, putting us in a strong cash position in these last few years and presenting a good opportunity to reconsider how to most effectively utilize our cash in a variety of strategic and meaningful ways.
"Let me describe the field we plan to actively focus on from a mid- to long-term perspective, given the changes in our current business environment. These efforts will be made in addition to our conventional research and development and capital expenditures.
"The new fields where we will utilize our cash can be broadly classified under maintaining and expanding relationships with consumers.
"These software assets include games, and we aim to expand our game development frameworks inside the Nintendo group. We are not dismissing the possibility of M&A activities, but our first priority is to organically expand in our own organization to continue Nintendo's creative cultures."
A life-long and avid gamer, William D'Angelo was first introduced to VGChartz in 2007. After years of supporting the site, he was brought on in 2010 as a junior analyst, working his way up to lead analyst in 2012. He has expanded his involvement in the gaming community by producing content on his own YouTube channel and Twitch channel dedicated to gaming Let's Plays and tutorials. You can contact the author at wdangelo@vgchartz.com or on Twitter @TrunksWD.
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The must have made a killing with Switch hardware and software to just drop 4 Billion on these investments.
Considering online subs and their 1st party sales, i dare say it's making way more money than Wii or any other Nintendo hardware, likely 2º most profitable Console ever, and still going strong.
That's great news but why did it take them years to do it?! They've been making money hand over fist with the Switch for years. Considering they went from two systems to just one system and they no longer have a system that they can make small cheap games for, you'd have thought they would have done this several years ago to get all their series on the Switch.
And they should have dedicated this sort of money to the online services since it's launch in 2018.
Nintendo is just now realizing that they could spend some of their massive amount of profits on improving these things?! Weird. I mean the Switch is amazing, and better late than never, but come on. Basically this stuff will have an effect on Switch 2 given the time it takes to build out significant things. It's sad they didn't decide to use Switch profits earlier to improve things while they could have had an effect on the Switch itself.
They have the talent, brand recognition and IPs. After the Switch, i fully think their brand is strong enough now to release a maybe a little bit more high-end product as a successor. OLED is selling out at 350$ without a power increase... i'm sure they can launch their next system at 400$ with no problem. I hope they continue to push ambition in their IP like they seem to have restarted doing after that Wii/Wii U phase. Botw 2, Kirby Forgotten Land and Prime 4 are only examples. They have also been thinking outside their usual box with movies and parks so it's going to be an exciting time.
Nintendo already had strong brand power though. Basically every console with the exception of the Wii U, virtual boy, and gamecube were pretty popular and fondly remembered.
But I don't see them breaking back into the power wars. It's already a losing battle with PC gaining popularity. It's not a weakness though. The next console will be a substantial upgrade, but they won't be shooting for high end graphics. Probably another 300 dollar console with pleasantly modern graphics but not anything particularly impressive.
Their brand with the Wii/WiiU era kinda went towards families and children which they then kinda abandoned them towards 2010. For the past 20 years Nintendo's brand as never been as strong and healthy as it is now. And i'm not saying they will go back to the power race at all, but i think they have the possibility to make a more high end device than they have been doing since the Wii/DS era. Just meaning they can sell at a higher cost and get away with it currently.
I'd still argue that people like me, and probably you, don't associate Nintendo with the Wii era. Mario, Zelda, smash bros, Mario kart, etc more or less transcend the brand.
I feel as though I miss spoke. The consoles are remembered fondly because of the games rather than the systems. Twilight princess is remembered as a great game but not because of the Wii. Same with Mario Galaxy. But they also have great games on the consoles before and after. So the franchises are what gives Nintendo the brand power. That's why I would argue that they never really lost any.
I will agree it's stronger than ever, but not so much that it faltered and recovered. Those aspects of Nintendo have continued to be strong and even gained strength. It just seems not entirely accurate to say that the prior 15 years were a step backwards.
Very good, good sw developers needs to expand and release more to give us more good stuff to buy. Considering their strong reserves and how much Sony is investing Nintendo could invest a lot more, but well they are already quite good for their userbase.
Indeed... Nintendo userbase accepts current Nintendo as "quite good".
"actually an example to follow..."
Hello, I respectfully offer an answer.
You know, from a business perspective you are absolutely correct, the guys at Nintendo are geniuses! Nintendo does magic, inferior quality of services (especially online), low content production, few content discounts on store, less support from 3rd party partners, overpriced and outdated hardware, etc. somehow they make a truckload of stuff that would create rivers of criticism for the Playstation and Xbox, but for some reason a big deal of Nintendo audience seems "okay" with it...
From an investor point of view, "Big N" really is amazing! Now... as a consumer I respectfully disagree with you, I think they fall short when compared to Xbox, PC and Playstation rivals. Nintendo is lacking in many areas, they need to improve and I don't consider them "an example to follow", far from it.
I hope I haven't offended anyone with my words, I apologize if I have upset anyone. I'm not a native speaker, forgive my poor English.
I'm glad we managed to agree at some points. It's always good to have a civilized conversation where both sides can understand each other and show respect. Receive my "4 mutant thumbs" reciprocally my colleague. Thanks for praising my English, I still have to work on it, but google helps me a lot.
Can only agree with both that when separating what is "good for customer" and "good for business" Nintendo have been able to get a lot of bang for their buck and yes for people of other userbase it seems like Nintendo fanbase is more willing to tolerate some actions that would be harshly trashed on the others (same as some actions took on by MS and Sony were more acceptable for their fanbase but completly bad on the eyes of Nintendo fanbase).
Next F-Zero coming 2030.
About time I would say.
Hopefully this will mean dormant IPs will get better treatment.
Good to see them putting money back into the buisness
Holy shit! This is bigger than the GDP of some island nations here in the Caribbean. And its all on video games. LOL
Don't misinterpret yen with dollar =p I don't think many island on Caribbean have less than 1Bi USD of GDP. And if you look at gaming well MS made a purchase of over 8Bi of a single company, Sony separated more than 4Bi for investments this year, Tecent and some others are also putting several billions in investment. Gaming Industry is bigger than movie.
Nintendo as the data of how many switch are currently in use, just because they sold almost 95 million Switch.
That doesn't mean they have 95 million active user and the switch have been lacking in new content. It's good thing they embrace indie games.
Sure they have the data.
200% agree with you.
Totally agree. 2017 was amazing. 2019 was ok. 2018 2020 and 2021 were all horrible. Hardware is too limited and stopping good ports also. I've only played and enjoyed ONE Switch game this year, the fantastic Metroid Dread. That's it. Here's hoping 2022 is the year! Amazing games coming and new hardware also, we hope. I'm not playing BOTW 2 on Switch.
You can't compare 2017 to any console. It's not the best year for the switch. It was the best year for any console ever.
2018 was weak with the exception of smash. The other years were average. You can't say they were bad because you're comparing them to an amazing year.
And how does the budget of a game, which you don't even know per game, affect the enjoyment of it? The lowest budgets are certainly multimillion dollar games. If Nintendo doesn't spend 500 million dollars on one game, good. The rising budgets are killing the industry and diversity. Yeah, other companies might spend more money, but I hope you like 3rd person adventure games because that's all they make.
You realize what you're comparing them to, do you? The Switch's 2017 was one of the single best years for ANY gaming system in history. BOTW, Odyssey, Mario Kart, SPLT2, XBC2 all within 9 months of each other. Very few consoles can compare to that kind of year, especially launch years.
2019 was just as good as 2017 in quantity, if not better, (Three Houses, LM3, Astral Chain, Mario Maker 2, Yoshi, MUA 3, LA, DQXIS - which was the start of 3rd parties starting to really show up on the system).
2018 was a bit underwhelming outside of Smash Bros. but that was bound to happen given how gargantuan of a year 2017 was. They can't maintain that high forever. There are peaks and valleys to this. 2020 was a shit year for everyone given the circumstances. And 2021 has been pretty solid this year.
And what the hell does "low-budget effort" have anything to do with it? What does that even mean?!? The budget is just how much money goes into their games, which varies depending on the genre. Something like Astral Chain, Luigi's Mansion 3, Paper Mario, or even Metroid Dread, are not going to have budgets remotely close to the likes of Breath of the Wild, Super Mario Odyssey, or Xenoblade 2 will have. But I enjoyed every one of those games all the same. Sonic Mania, Celeste, and Shantae are some of the lowest budgeted games in my Switch library, Yet I got FAR more enjoyment out of them, than I did with some of the bigger and more ambitious projects in my library. Life is Strange has a much, MUCH smaller budget than Skyrim, yet I loved Life is Strange to pieces, while Skyrim bored the living hell out of me. All the budget means is how much funding the project receives, it has little to do with effort and more importantly, the consumer's personal enjoyment out of the product.
As far as their business decisions go, I couldn't give two shits because if they do or release something I don't like, I simply just don't buy the product in question. And if said product ends up succeeding, then that's more on the consumers than Nintendo themselves. I can't blame the scorpion for stinging someone, that's their nature. But I CAN blame that person for picking up the scorpion and trying to pet it like a dumbass.
